3.1 Introduction

Technologies and measures to reduce greenhouse gas emissions are continuously
being developed (Nadel et al., 1998; National Laboratory Directors, 1997; PCAST,
1997; Martin et al., 2000). Many of these technologies focus on improving the
efficiency of fossil fuel use since more than two-thirds of the greenhouse gas
emissions addressed in the Kyoto Protocol (in carbon dioxide equivalents) are
related to the use of energy. Energy intensity (energy consumed divided by gross
domestic product (GDP)) and carbon dioxide intensity (CO2 emitted
from burning fossil fuels divided by the amount of energy produced) have been
declining for more than 100 years in developed countries without explicit government
policies for decarbonization and both have the potential to decline further.
Non-fossil fuel energy sources are also being developed and implemented as a
means of reducing greenhouse gas emissions. Physical and biological sequestration
of CO2 can potentially play a role in reducing greenhouse gas emissions
in the future. Other technologies and measures focus on reducing emissions of
the remaining major greenhouse gases - methane, nitrous oxide, hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6) (see
Section 3.5 and Appendix
to this Chapter).

Table 3.1 shows energy consumption in the four end-use
sectors of the global economy  industry, buildings, transport, and agricultureover
time1.
Data are displayed for six world regions  developed countries, countries
with economies in transition (EITs), developing Asia-Pacific countries, Africa,
Latin America and the Middle East. Comparing global annual average growth rates
(AAGRs) for primary energy use in the period 1971 to 1990 and 1990 to 1995 a
significant decrease is noticed from 2.5% in the first period to about
1.0% in the latter, due almost entirely to the economic crisis in the EITs.
Overall, growth averaged about 2.0% per year from 1971 to 1995. Table
3.1 also shows carbon dioxide emissions from energy consumption for four
world regions. The AAGR of global carbon dioxide emissions from the use of energy
also declined (from 2% to 1%) in the same periods. A different picture emerges
if the countries with economies in transition are excluded. In this case, growth
in world energy use averaged about 2.5% per year in both the 1971 to 1990 and
1990 to 1995 periods, while average annual growth in carbon dioxide emissions
was 2.0% and 2.6% during the same time periods, respectively.

Uncertainty in Table 3.1 arises in a number of areas.
First, the quality of energy data from the International Energy Agency (IEA)
is not homogeneous because of the use of various reporting mechanisms and official
sources of national data (IEA, 1997a; IEA, 1997b; IEA, 1997c)2.
Second, for the economies in transition, primary energy use data and carbon
dioxide data are from two different sources (BP, 1997; IEA, 1997a; IEA, 1997b;
IEA, 1997c). There are inconsistencies between the two sources, and no analysis
has yet been done to resolve them. Third, IEA statistics report sectoral data
for the industrial and transport sectors, but not for buildings and agriculture,
which are reported as other. These sectors have been estimated using
an allocation scheme described in Price et al. (1998)3.
In general, the most uncertainty is associated with data for the economies in
transition region, and for the commercial and residential sub-categories of
the buildings sector in all regions.

It is likely that total commercial energy production and demand estimates will
be known accurately for most developed countries (within one or a few per cent),
relatively accurately for some developing countries (with an uncertainty of
1% to 5%), and less accurately for developing countries with poorly functioning
data gathering and statistical systems. Converting the energy data into carbon
emissions introduces some increased uncertainty  primarily as a consequence
of the fraction of natural gas that leaks to the atmosphere and the fraction
of all fossil fuels that are left uncombusted  the uncertainty in carbon
emissions is greater than that of energy use. Uncertainties in non-CO2
greenhouse gas emissions are greater than those for carbon emissions.

In general, energy supply statistics, and their disaggregation into fuel types,
are more reliable than statistics for energy demand. In particular, the estimates
of sectoral energy demand (buildings, industry, transportation, agriculture)
and the further disaggregation into subsectors (e.g., residential and commercial
buildings; auto transportation; specific industries), and then into end uses
has relatively high levels of uncertainty for at least two reasons. First, the
full data to perform these disaggregations are rarely gathered at the national
level, so that assumptions and approximations need to be made. Second, the conventions
vary among different countries as to what energy use belongs to which sector
or subsector (e.g., the distinction between residential and commercial buildings;
the issue of whether energy use in industrial buildings counts as industrial
or building energy use).

The least accurate data are for non-commercial energy use, especially in developing
countries  dung, plant or forest waste, logs, and crops used for energy.
Energy use from these sources is generally estimated from surveys, and is known
very poorly. Because of uncertainty about whether these sources are used in
sustainable ways and, even more importantly, because the release of products
of incomplete combustion  which are potent greenhouse gases  are
poorly characterized, the overall contribution of non-commercial energy sources
to greenhouse gas emissions is only somewhat better than an educated guess at
this time.

An important observation from Table 3.1 is the high AAGR
in the transport sector for energy and carbon emission. AAGR is not only the
greatest for the transport sector, but it has slowed only slightly since 1960
despite significant improvements in technology. Because of the increase in the
number of vehicles, and the recent decline in energy efficiency gains as vehicles
have become larger and more powerful, transportation now is responsible for
22% of CO2 emission from fuel use (1995). Unlike electricity, which
can be produced from a variety of fuels, air and road transport is almost entirely
fuelled with petroleum, except for ethanol and biodiesel used in a few countries.
Biomass-derived fuels and hydrogen production from fossil fuels with carbon
sequestration technology, in parallel with improved fuel efficiency conversion,
are some of the few more promising alternatives for reducing significantly carbon
emissions in the transport sector for the next two decades. The accelerated
introduction of hybrid and fuel cell vehicles is also promising, but these gains
are already being offset by increased driving, and the rapid growth of the personal
vehicle market worldwide.

Oil, gas, and coal availability is still recognized to be very extensive. Fossil
fuel reserves are estimated to be approximately five times the carbon content
of all that have been used since the beginning of the industrial revolution.
The possibility of using gas hydrates and coal bed methane as a source of natural
gas has increased since the SAR.

Greenhouse gas (GHG)-reducing technologies for energy systems for all sectors
of the economy can be divided into three categories  energy efficiency,
low or no carbon energy production, and carbon sequestration (Acosta Moreno
et al., 1996; National Laboratory Directors, 1997). Even though progress will
continue to be made in all categories, it is expected that energy efficiency
will make a major contribution in the first decade of the 21st century. Renewable
technologies are expected to begin to be significant around 2010, and pilot
plants for the physical carbon sequestration from fossil fuels4
will be the last mitigation option to be adopted because of cost (National Laboratory
Directors, 1997). Nevertheless, with appropriate policies, economic barriers
can be minimized, opening possibilities for all the three categories of mitigation
options. Considering the large number of available technologies in all categories
and the still modest results obtained to date (see Table 3.1),
it is possible to infer that their commercial uses are being constrained by
market barriers and failures as well as a lack of adequate policies to induce
the use of more costly mitigation options (see Chapters
5 and 6). This should not be interpreted as a reason
to reduce R&D efforts and funding, since technological advances always help
to cut costs and consequently reduce the amount and intensity of policies needed
to overcome the existing economic barriers. Implementing new technological solutions
could start soon by establishing policies that will encourage demand for these
devices and practices. Complex technological innovations advance through a non-linear,
interactive innovation process in which there is synergy between scientific
research, technology development, and deployment activities (OTA, 1995a; Branscomb
et al., 1997; R&D Magazine, 1997). Early technology demand can be stimulated
through well-placed policy mechanisms.

In this chapter numerous technologies are discussed that are either already
commercialized or that show a probable likelihood to be in the commercial market
by the year 2020, along with technologies that might possibly contribute to
GHG abatement by 2010. For the quantification of the abatement capacity of some
of the technologies a horizon as far as 2050 must be considered since the capital
stock turnover rate, especially in the energy supply sector, is very low.

A number of new technologies and practices have gained importance since the
preparation of SAR, including:

Buildings

Off-grid building photovoltaic energy supply systems;

Integrated building design for greater efficiency.

Transportation

Hybrid electric vehicles;

Fuel cell vehicles.

Industry

Advanced sensors and controls for optimizing industrial processes;

Large reductions in process gases such as CF4, N2O
and HFCs through improved industrial processes;

Reduced energy use and CO2 emissions through improvements in
industrial processing, remanufacturing, and use of recycled materials;

Improved containment and recovery of CFC substitutes, the use of low Global
Warming Potential (GWP) alternatives, and the use of alternative technologies.

Fuel cells for distributed power and low temperature heat applications;

Conversion of cellulosic materials for production of ethanol;

Wind-based electricity generation;

Carbon sequestration in aquifers and depleted oil and gas wells;

Increased coal bed methane and landfill gas use;

Replacement of grid connected electricity by PV;

Nuclear plants life extension.

Cost data are presented in this chapter for many mitigation options. They are
derived from a large number of studies and are not fully comparable. However,
in general, the following holds for the studies quoted in this Chapter. The
specific mitigation costs related to the implementation of an option are calculated
as the difference of levelized costs5
over the difference in greenhouse gas emissions (both in comparison to the situation
without implementation of the option). Costs are generally calculated on a project
basis (for a definition see Chapter 7, Section
7.3.1). The discount rates used in the cost calculation reflect real public
sector discount rates (for a discussion of discount rates, see Chapter
7, Section 7.2.4). Generally, the discount
rates in the quoted studies are in the range of 5%12% per year. It should
be noted that the discount rates used here are lower than those typically used
in private sector decision making. This means that options reported in this
chapter to have negative net costs will not necessarily be taken up by the market.
Furthermore, it should be noted that in some cases even small specific costs
may form a substantial burden for companies.

Notes:
Emissions from energy use only; does not include feedstock or CO2
from calcination in cement production. Biomass = no emissions. Rest of World
= Africa, Latin America, Middle East.
Primary energy use and CO2 emissions for Economies in Transition
are from different sources and thus cannot be compared to each other.
Primary energy calculated using a standard 33% electricity conversion rate.